DEED OF TRUST, ASSIGNMENT OF LEASES AND RENTS, SECURITY AGREEMENT AND FIXTURE FILING

NOTICE OF CONFIDENTIALITY RIGHTS: IF YOU ARE A NATURAL PERSON, YOU MAY REMOVE OR STRIKE ANY OF THE FOLLOWING INFORMATION FROM THIS INSTRUMENT BEFORE IT IS FILED FOR RECORD IN THE PUBLIC RECORDS: YOUR SOCIAL SECURITY NUMBER OR YOUR DRIVER'S LICENSE NUMBER.

Borrower’s Federal Identification No.: 26-3650072

THIS DEED OF TRUST, ASSIGNMENT OF LEASES AND RENTS, SECURITY AGREEMENT AND FIXTURE FILING (this “ Mortgage ”) is made as of this ___ day of January, 2009, by CARUTH HAVEN L.P. ,  a Delaware limited partnership, having its principal place of business at c/o Cornerstone Growth & Income REIT, Inc., 1920 Main Street, Suite 400, Irvine, California 92614, as grantor (“ Borrower ” or “ Grantor ”), to PETER S. GRAF , having an address at c/o Republic Title of Texas, Inc., 2626 Howell Street, 10th Floor, Dallas, Texas 75204, as trustee (“ Trustee ”), for the benefit of CORNERSTONE OPERATING PARTNERSHIP,  LP, a Delaware limited partnership, its successors and assigns, having an address at 1920 Main Street, Suite 400, Irvine, California 92614, as beneficiary (“ Lender ” or “ Beneficiary ”).

WHEREAS, this Mortgage is given to secure a loan (the “ Loan ”) in the principal sum of FOURTEEN MILLION 00/100 DOLLARS ($14,000,000.00) evidenced by that certain Promissory Note dated the date hereof made by Borrower to Lender (such Note, together with all extensions, renewals, replacements, restatements, consolidations or modifications thereof being hereinafter referred to as the “ Note ”), which Note provides, among other things, for final payment of principal and interest thereunder, if not sooner paid or payable as provided therein, to be due on January ___, 2010;

WHEREAS, Borrower desires to secure the payment of the indebtedness evidenced by the Note and the performance of all of its obligations under the Note and the other Loan Documents; and

WHEREAS, this Mortgage is that certain “Security Instrument” as defined in the Note, and payment, fulfillment, and performance by Borrower of its obligations thereunder and under the other Loan Documents are, subject to the limitations set forth herein, secured hereby, and each and every term and provision of the Note, including the rights, remedies, obligations, covenants, conditions, agreements, indemnities, representations and warranties of the parties therein, are hereby incorporated by reference herein as though set forth in full and shall be considered a part of this Mortgage.

NOW THEREFORE, in consideration of the making of the Loan by Lender and the covenants, agreements, representations and warranties set forth in this Mortgage:

THAT FOR AND IN CONSIDERATION OF THE SUM OF TEN AND NO/100 DOLLARS ($10.00), AND OTHER VALUABLE CONSIDERATION, INCLUDING THE INDEBTEDNESS HEREIN RECITED AND THE TRUST HEREIN CREATED, THE RECEIPT AND SUFFICIENCY OF WHICH ARE HEREBY ACKNOWLEDGED, GRANTOR HEREBY IRREVOCABLY GRANTS, BARGAINS, SELLS, CONVEYS, TRANSFERS, PLEDGES, SETS OVER AND ASSIGNS, AND GRANTS A SECURITY INTEREST, TO

AND IN FAVOR OF TRUSTEE FOR THE BENEFIT OF BENEFICIARY, ITS SUCCESSORS AND ASSIGNS, WITH POWER OF SALE, in all of Grantor's estate, right, title and interest in, to and under any and all of the following described property, whether now owned or hereafter acquired (collectively, the " Property "):

(A)     All that certain real property situated in the County of Dallas, State of Texas, more particularly described on Exhibit A attached hereto and incorporated herein by this reference (the “ Real Estate ”), together with all of the easements, rights, privileges, franchises, tenements, hereditaments and appurtenances (including without limitation, any air rights and development rights) now or hereafter thereunto belonging or in any way appertaining and all of the estate, right, title, interest, claim and demand whatsoever of Grantor therein or thereto, either at law or in equity, in possession or in expectancy, now owned or hereafter acquired;

(B)           All structures, buildings and improvements of every kind and description now or at any time hereafter located or placed on the Real Estate (the " Improvements ");

(C)           All easements, rights-of-way, strips and gores of land, vaults, streets, ways, alleys, passages, sewer rights, and other emblements now or hereafter located on the Real Estate or under or above the same or any part or parcel thereof, and all estates, rights, titles, interests, tenements, hereditaments and appurtenances, reversions and remainders whatsoever, in any way belonging, relating or appertaining to the Property or any part thereof, or which hereafter shall in any way belong, relate or be appurtenant thereto, whether now owned or hereafter acquired by Grantor (collectively, “ Appurtenant Rights ”; and together with the Real Estate and Improvements, referred to collectively herein as the “ Real Property ”);

(D)           All furniture, furnishings, fixtures, goods, equipment, inventory or personal property owned by Grantor and now or hereafter located on, attached to or used in or about the Improvements, including, but not limited to, all machines, engines, boilers, dynamos, elevators, stokers, tanks, cabinets, awnings, screens, shades, blinds, carpets, draperies, lawn mowers, and all appliances, plumbing, heating, air conditioning, lighting, ventilating, refrigerating, disposal and incinerating equipment, and all fixtures and appurtenances thereto, and such other goods and chattels and personal property owned by Grantor as are now or hereafter used or furnished in operating the Improvements, or the activities conducted therein, and all building materials and equipment hereafter situated on or about the Real Estate or Improvements, and all warranties and guaranties relating thereto, and all additions thereto and substitutions and replacements therefor (exclusive of any of the foregoing owned or leased by tenants of space in the Improvements);

(E)           All water, water courses, ditches, wells, reservoirs and drains and all water, ditch, well, reservoir and drainage rights and powers which are appurtenant to, located on, under or above or used in connection with the Real Estate or the Improvements, or any part thereof, together (i) with all utilities, utility lines, utility commitments, utility capacity, capital recovery charges, impact fees and other fees paid in connection with same, (ii) reimbursements or other rights pertaining to utility or utility services provided to the Real Estate and/or Improvements and (iii) the present or future use or availability of waste water capacity, or other utility facilities to the extent same pertain to or benefit the Real Estate and/or Improvements,

including, without limitation, all reservations of or commitments or letters covering any such use in the future, whether now existing or hereafter created or acquired;

(F)           All minerals, crops, timber, trees, shrubs, flowers and landscaping features now or hereafter located on, under or above the Real Estate;

(G)           All cash funds, deposit accounts, reserve accounts, collection accounts and/or sub-accounts thereof, and other rights and evidence of rights to cash, now or hereafter created or held by Beneficiary pursuant to this Security Instrument or any other of the Loan Documents (as hereinafter defined), including, without limitation, the Reserves (as such term is defined in Section 1.8 hereof);

(H)           All leases, subleases, licenses, tenancies, concessions, occupancy and residency agreements of the Real Estate or the Improvements now or hereafter entered into (including, without limitation, that certain Lease Agreement by and between Grantor, as landlord, and Caruth Haven TRS, LLC, a Delaware limited liability company, as tenant (“ Tenant ”); dated as of January 1, 2009; hereinafter referred to as the “ TRS Lease ”) and all rents, royalties, issues, profits, bonus money, revenue, income, accounts receivable and other benefits (collectively, the " Rents " or " Rents and Profits ") of the Real Estate, the Improvements, or the fixtures or equipment, now or hereafter arising from the use or enjoyment of all or any portion thereof or from any lease, license, tenancy, concession, occupancy agreement, residency agreement or other agreements (including, without limitation, oil, gas and mineral leases, cable television, laundry, satellite and/or cell tower agreements, whether in the nature of a lease, license, contract, or otherwise), pertaining thereto or arising from any of the Contracts (as hereinafter defined) or any of the General Intangibles (as hereinafter defined) and all cash or securities (the " Security Deposits ") that secure performance by the tenants, lessees or licensees, as applicable, of their obligations under any such leases, licenses, concessions or occupancy agreements, or which may be available to Grantor or its designee to effect repairs or maintenance, whether said cash or securities are to be held until the expiration of the terms of said leases, licenses, concessions or occupancy agreements or applied to one or more of the installments of rent coming due prior to the expiration of said terms, subject to, however, the provisions contained in Section 1.11 of this Security Instrument;

(I)            All contracts and agreements now or hereafter entered into covering any part of the Real Estate or the Improvements (collectively, the " Contracts ") and all revenue, income and other benefits thereof, including, without limitation, management agreements, service contracts, maintenance contracts, equipment leases, personal property leases and any contracts or documents relating to construction on any part of the Real Estate or the Improvements (including plans, specifications, studies, drawings, surveys, tests, operating and other reports, bonds and governmental approvals) or to the management or operation of any part of the Real Estate or the Improvements;

(J)            All present and future monetary deposits given to any public or private utility with respect to utility services furnished to any part of the Real Estate or the Improvements;

(K)           All present and future funds, accounts, instruments, (including without limitation, promissory notes), investment property, letter of credit rights, letters of credit, money, supporting obligations, accounts receivable, documents, causes of action, claims, general intangibles (including, without limitation, payment intangibles and software, trademarks, trade names, servicemarks and symbols now or hereafter used in connection with any part of the Real Estate or the Improvements, all names by which the Real Estate or the Improvements may be operated or known, all rights to carry on business under such names, and all rights, interest and privileges which Grantor has or may have as developer or declarant under any covenants, restrictions or declarations now or hereafter relating to the Real Estate or the Improvements) and all notes or chattel paper (whether tangible or electronic) now or hereafter arising from or by virtue of any transactions related to the Real Estate or the Improvements (collectively, the " General Intangibles ");

(L)           All water taps, sewer taps, certificates of occupancy, permits, special permits, uses, licenses, franchises, certificates, consents, approvals and other rights and privileges now or hereafter obtained in connection with the Real Estate or the Improvements and all present and future warranties and guaranties relating to the Improvements or to any equipment, fixtures, furniture, furnishings, personal property or components of any of the foregoing now or hereafter located or installed on the Real Estate or the Improvements;

(M)          All building materials, supplies and equipment now or hereafter placed on the Real Estate or in the Improvements and all architectural renderings, models, drawings, plans, specifications, studies and data now or hereafter relating to the Real Estate or the Improvements;

(N)           All right, title and interest of Grantor in any insurance policies or binders now or hereafter relating to the Property including any unearned premiums thereon;

(O)           All proceeds, products, substitutions and accessions (including claims and demands therefor) of the conversion, voluntary or involuntary, of any of the foregoing into cash or liquidated claims, including, without limitation, proceeds of insurance and condemnation awards;

(P)           all refunds, rebates or credits in connection with a reduction in ad valorem taxes, assessments or similar impositions, including, without limitation, rebates, refunds or credits as a result of tax certiorari or any other application, proceeding or appeal (administrative, judicial or otherwise) for reduction in taxes, assessments or similar impositions; and

(Q)           All other or greater rights and interests of every nature in the Real Estate or the Improvements and in the possession or use thereof and income therefrom, whether now owned or hereafter acquired by Grantor.

FOR THE PURPOSE OF SECURING:

(1)           The debt evidenced by that certain Promissory Note (such Promissory Note; together with any and all renewals, modifications, amendments, restatements, consolidations, substitutions, replacements, and extensions thereof, is hereinafter referred to as the " Note ") of even date with this Security Instrument, made by Grantor and payable to the order of Beneficiary in the original principal amount of FOURTEEN MILLION AND NO/00

($14,000,000.00) (the " Loan " or the " Loan Amount "), together with interest (including, without limitation, interest at the Default Interest Rate (as defined in the Note)) and any fees as therein provided;

(2)           The full and prompt payment and performance of all of the provisions, agreements, covenants and obligations herein contained and contained in any other agreements, documents or instruments now or hereafter evidencing, securing or otherwise relating to the indebtedness evidenced by the Note (the Note, this Security Instrument, the Assignment (as hereinafter defined) and such other agreements, documents and instruments, together with any and all renewals, modifications, amendments, restatements, consolidations, substitutions, replacements, and extensions and modifications thereof, are hereinafter collectively referred to as the " Loan Documents ") and the payment of all other sums therein covenanted to be paid, including, without limitation, any prepayment fees or yield maintenance premium;

(3)           Any and all future or additional advances (whether or not obligatory) made by Beneficiary to protect or preserve the Property, or the lien or security interest created hereby on the Property, or for taxes, assessments or insurance premiums as hereinafter provided or for performance of any of Grantor's obligations hereunder or under the other Loan Documents or for any other purpose provided herein or in the other Loan Documents (whether or not the original Grantor remains the owner of the Property at the time of such advances), together with interest thereon at the Default Interest Rate (as defined in the Note), such advances to be secured to the same extent as if such future advances were made on the date hereof and although there may be no indebtedness outstanding at the time any advance is made; and

(4)           Any and all other indebtedness now owing or which may hereafter be owing by Grantor to Beneficiary under the Note and related Loan Documents and related to the Property, however and whenever incurred or evidenced, whether express or implied, direct or indirect, absolute or contingent, or due or to become due, and all renewals, modifications, amendments, restatements, consolidations, substitutions, replacements and extensions thereof.

(All of the sums referred to in Paragraphs (1) through (4) above are herein sometimes referred to as the " secured indebtedness " or the " indebtedness secured hereby " or the “ Debt ”).

TO HAVE AND TO HOLD the above granted and described Property unto Trustee, as trustee for the benefit of Lender, and its successors and assigns, forever;

IN TRUST, WITH THE POWER OF SALE, to secure payment to Lender of the Debt at the time and in the manner provided for in the Note, the Loan Agreement, and this Mortgage;

PROVIDED, HOWEVER, these presents are upon the express condition that, if Borrower shall well and truly pay to Lender the Debt at the time and in the manner provided in the Note, the Loan Agreement and this Mortgage, shall well and truly perform the Other Obligations as set forth in this Mortgage and shall well and truly abide by and comply with each and every covenant and condition set forth herein and in the Note and the other Loan Documents, these presents and the estate hereby granted shall cease, terminate and be void and Lender shall mark the Note “paid in full” and will, at Borrower’s sole cost and expense, release

the lien of this Mortgage; provided, however, that Borrower’s obligation to indemnify and hold harmless Lender pursuant to the provisions hereof shall survive any such payment or release.

For the purpose of further securing the indebtedness secured hereby and for the protection of the security of this Security Instrument, for so long as the indebtedness secured hereby or any part thereof remains unpaid, Grantor represents, covenants and agrees as follows:

1.1 Warranties of Grantor .  Grantor, for itself and its successors and assigns, does hereby represent, warrant and covenant to and with Beneficiary, its successors and assigns, that:

(a)            Organization and Existence .  Grantor is duly organized and validly existing as a limited partnership in good standing under the laws of Delaware and in all other jurisdictions in which Grantor is transacting business.

(b)            Authorization .  Grantor has the power and authority to execute, deliver and perform the obligations imposed on it under the Loan Documents and to consummate the transactions contemplated by the Loan Documents and has taken all necessary actions in furtherance thereof including, without limitation, that those partners, shareholders, managers, or members of Grantor whose approval or consent is required by the terms of Grantor's organizational documents have duly approved or consented to the transactions contemplated by the Loan Documents and have authorized execution and delivery thereof by the respective signatories.  To the best of Grantor's knowledge, no other consent by any local, state or federal agency is required in connection with the execution and delivery of the Loan Documents.

(c)            Valid Execution and Delivery .  All of the Loan Documents requiring execution by Grantor have been duly and validly executed and delivered by Grantor.

(d)            Enforceability . All of the Loan Documents constitute valid, legal and binding obligations of Grantor and are fully enforceable against Grantor in accordance with their terms, subject only to bankruptcy laws and general principles of equity.

(e)            No Defenses .  The Note, this Security Instrument and the other Loan Documents are not subject to any right of rescission, set-off, counterclaim or defense, nor would the operation of any of the terms of the Note, this Security Instrument or any of the other Loan Documents, or the exercise of any right thereunder, render this Security Instrument unenforceable, in whole or in part, or subject to any right of rescission, set-off, counterclaim or defense, including the defense of usury.

(f)            Defense of Usury .  Grantor knows of no facts that would support a claim of usury to defeat or avoid its obligation to repay the principal of, interest on, and other sums or amounts due and payable under, the Loan Documents.

(g)            No Conflict/Violation of Law .  The execution, delivery and performance of the Loan Documents by the Grantor will not cause or constitute a default under or conflict

with the organizational documents of Grantor, any indemnitor or any general partner, manager, or managing member of Grantor or any indemnitor.  The execution, delivery and performance of the obligations imposed on Grantor under the Loan Documents will not cause Grantor to be in default, including after due notice or lapse of time or both, under the provisions of any agreement, judgment or order to which Grantor is a party or by which Grantor is bound.

(h)            Compliance with Applicable Laws and Regulations .  All of the Improvements and the use of the Property by the Grantor comply in all material respects with, and shall remain in compliance with, all applicable statutes, rules, regulations and private covenants now or hereafter relating to the ownership, construction, use or operation of the Property, including all applicable statutes, rules and regulations pertaining to requirements for equal opportunity, anti-discrimination, fair housing, environmental protection, zoning and land use.  The Improvements comply with, and shall remain in compliance with, applicable health, fire and building codes.  There is no evidence of any illegal activities relating to controlled substances on the Property.  All certifications, permits, licenses and approvals, including, without limitation, certificates of completion and occupancy permits required for the legal use, occupancy and operation of the Property for the use currently being made thereof have been obtained and are in full force and effect.  All of the Improvements comply with all material requirements of any applicable zoning and subdivision laws and ordinances.   The Grantor has all requisite licenses, permits, franchises, qualifications, certificates of occupancy or other governmental authorizations to own, lease and operate the Property (provided that to the extent the Property is operated by Tenant, Tenant has all such requisite licenses, permits, franchises, qualifications and other governmental authorizations) and carry on its business.

(i)            Consents Obtained .  All consents, approvals, authorizations, orders or filings with any court or governmental or administrative agency or body, if any, required for the execution, delivery and performance of the Loan Documents by Grantor have been obtained or made.

(j)            No Litigation .  There are no pending actions, suits or proceedings, arbitrations or governmental investigations against the Property, Grantor or any guarantor of Grantor an adverse outcome of which would materially affect (i) the Grantor's performance under the Note, this Security Instrument or the other Loan Documents, (ii) the Property, (iii) the Loan, or (iv) the ability of the Property to continue to generate income, or continue in operation, in a manner consistent with current operations.

(k)            Title .  The Grantor has good and marketable fee simple title to the Property, subject only to those matters expressly listed as exceptions to title or subordinate matters in the title insurance policy accepted by Beneficiary in connection with this Security Instrument (all such matters, excluding therefrom all preprinted and/or standard exceptions are referred to herein, collectively, as the " Permitted Exceptions ").  The possession of the Property has been peaceful and undisturbed and title thereto has not been disputed or questioned to the best of Grantor's knowledge.  Further, Grantor and has full power and lawful authority to grant, bargain, sell, convey, assign, transfer and mortgage its interest in the Property in the manner and form hereby done or intended.  Grantor will preserve its interest in and title to the Property and will forever warrant and defend the same to Beneficiary against any and all claims whatsoever and will forever warrant and defend the validity and priority of the lien and security interest

created herein against the claims of all persons and parties whomsoever, subject to the Permitted Exceptions.  The foregoing warranty of title shall survive the foreclosure of this Security Instrument and shall inure to the benefit of and be enforceable by Beneficiary in the event Beneficiary acquires title to the Property pursuant to any foreclosure.

(l)            Permitted Exceptions .  The Permitted Exceptions do not and will not materially and adversely affect (1) the ability of the Grantor to pay in full the principal and interest on the Note in a timely manner or (2) the use of the Property for the use currently being made thereof, the operation of the Property as currently being operated or the value of the Property.

(m)           First Lien .  Upon the execution by the Grantor and the recording of this Security Instrument, and upon the execution and filing of UCC-1 financing statements or amendments thereto, the Beneficiary will have a valid first lien on the Property and a valid security interest in all personal property encumbered hereby, subject to no liens, charges or encumbrances other than the Permitted Exceptions.

(n)            ERISA .  The Grantor has made and shall continue to make all required contributions to all employee benefit plans, if any, established or maintained by it, if any, and the Grantor has no knowledge of any material liability which has been incurred by the Grantor which remains unsatisfied for any taxes or penalties with respect to any such employee benefit plan or any such multi-employer plan, and each such plan has been administered in compliance with its terms and the applicable provisions of the Employee Retirement Income Security Act of 1974, as amended (" ERISA ") and any other federal or state law.

(o)            Contingent Liabilities .  The Grantor has no known material contingent liabilities.

(p)            No Other Obligations .  The Grantor has no material financial obligation under any indenture, mortgage, deed of trust, loan agreement or other agreement or instrument to which the Grantor is a party or by which the Grantor or the Property is otherwise bound, other than obligations incurred in the ordinary course of the operation of the Property and other than obligations under this Security Instrument, the Note and the other Loan Documents.

(q)            Fraudulent Conveyance .  The Grantor (1) has not entered into the Loan or any Loan Document with the actual intent to hinder, delay, or defraud any creditor and (2) received reasonably equivalent value in exchange for its obligations under the Loan Documents.  Giving effect to the Loan contemplated by the Loan Documents, the fair saleable value of the Grantor's assets exceed and will, immediately following the execution and delivery of the Loan Documents, exceed the Grantor's total liabilities, including, without limitation, subordinated, unliquidated, disputed or contingent liabilities (if permitted hereunder).  The fair saleable value of the Grantor's assets is and will, immediately following the execution and delivery of the Loan Documents, be greater than the Grantor's probable liabilities, including the maximum amount of its contingent liabilities or its debts as such debts become absolute and matured (if permitted hereunder).  The Grantor's assets do not and, immediately following the execution and delivery of the Loan Documents will not, constitute unreasonably small capital to carry out its business as conducted or as proposed to be conducted. The Grantor does not intend to, and does not believe

that it will, incur debts and liabilities (including, without limitation, contingent liabilities and other commitments) beyond its ability to pay such debts as they mature (taking into account the timing and amounts to be payable on or in respect of obligations of the Grantor).

(r)            Investment Company Act .  The Grantor is not (1) an "investment company" or a company "controlled" by an "investment company," within the meaning of the Investment Company Act of 1940, as amended; (2) a "holding company" or a "subsidiary company" of a "holding company" or an "affiliate" of either a "holding company" or a "subsidiary company" within the meaning of the Public Utility Holding Company Act of 1935, as amended; or (3) subject to any other federal or state law or regulation which purports to restrict or regulate its ability to borrow money.

(s)            Access/Utilities .  The Property has adequate rights of access to public ways and is served by adequate water, sewer, electric, gas, telephone, cable (where appropriate), sanitary sewer and storm drain facilities.  All public utilities necessary to the continued use and enjoyment of the Property as presently used and enjoyed are located in the public right-of-way abutting the Property, and all such utilities are connected so as to serve the Property without passing over other property.  All roads, and access to such roads, necessary for the full utilization of the Property for its current purpose have been completed and dedicated to public use and accepted by all governmental authorities or are the subject of access easements for the benefit of the Property without any further condition or cost to Grantor or any tenants or other legal occupants of the Property (collectively, the “ Tenants ”).

(t)            Taxes Paid .  Grantor has filed all federal, state, county and municipal tax returns required to have been filed by Grantor or with respect to the Property, and has paid all taxes which have become due pursuant to such returns or to any notice of assessment relating to the Property, and Grantor has no knowledge of any basis for additional assessment with respect to such taxes.  Grantor has paid or caused to be paid all sales and payroll taxes applicable to Borrower or the Property.  Further, the Property is free from delinquent water charges, sewer rents, taxes and assessments.

(u)            Single Tax Lot .  The Real Estate consists of a single tax lot and no portion of said tax lot covers property other than the Real Estate or a portion of the Real Estate and no portion of the Real Estate lies in any other tax lot.

(v)            Special Assessments .  Except as disclosed in the title insurance policy, there are no pending or, to the knowledge of the Grantor, proposed special or other assessments for public improvements or otherwise affecting the Property, nor, to the knowledge of the Grantor, are there any contemplated improvements to the Property that may result in such special or other assessments.

(w)            Flood Zone .  The Property is not located in a flood hazard area as defined by the Federal Insurance Administration.

(x)            Seismic Exposure .  The Real Estate are not located in Zone 3 or Zone 4 of the "Seismic Zone Map of the U.S.".

(y)            Misstatements of Fact .  No statement made in application for the Loan or

the Loan Documents contains any untrue statement of a material fact or omits to state any material fact necessary to make statements contained herein or therein not misleading.  There is no fact presently known to the Grantor which has not been disclosed which adversely affects, nor as far as the Grantor can foresee, might adversely affect the business, operations or condition (financial or otherwise) of the representing party.  Further, and in clarification of the foregoing, all reports, certificates, affidavits, statements and other data furnished by or on behalf of Grantor to Beneficiary, or their respective agents, in connection with the Loan are true and correct in all material respects and do not include or omit to state any fact or circumstance which inclusion or omission, respectively, would make the statements therein misleading.

(z)            Condition of Improvements .  The Property has not been damaged by fire, water, wind or other cause of loss and any previous damage to the Property has been fully restored.   To Grantor’s knowledge, the Improvements are structurally sound, in good repair and free of defects in materials and workmanship and have been constructed and installed in substantial compliance with the plans and specifications relating thereto.  To Grantor’s knowledge, all major building systems located within the Improvements, including, without limitation, the heating and air conditioning systems and the electrical and plumbing systems, are in good working order and condition.

(aa)          No Insolvency or Judgment .  None of Grantor, any general partner, manager or member of Grantor, or any guarantor of the Loan, is currently (a) the subject of or a party to any completed or pending bankruptcy, reorganization or insolvency proceeding; or (b) the subject of any unsatisfied judgment of record or docketed in any court of the state in which the Property is located or in any other court located in the United States.  The proposed Loan will not render the Grantor nor any general partner or member of Grantor insolvent.  As used in this paragraph, the term "insolvent" means that the sum total of all of an entity's liabilities (whether secured or unsecured, contingent or fixed, or liquidated or unliquidated) is in excess of the value of all such entity's non-exempt assets, i.e., all of the assets of the entity that are available to satisfy claims of creditors.

(bb)          No Condemnation .  No part of any property subject to the Security Instrument has been taken in condemnation or other like proceeding to an extent which would impair the value of the Property, the Security Instrument or the Loan or the usefulness of such property for the purposes contemplated by the loan application relating to the Loan (the " Loan Application "), nor is any proceeding pending, known or, to Grantor’s knowledge, threatened, to be contemplated for the partial or total condemnation or taking of the Property.

(cc)           No Labor or Materialmen Claims/Labor Disputes .  All parties furnishing labor and materials have been paid in full and, except for such liens or claims insured against by the policy of title insurance to be issued in connection with the Loan, there are no mechanics', laborers' or materialmen's liens or claims outstanding for work, labor or materials affecting the Property, whether prior to, equal with or subordinate to the lien of the Security Instrument.  To the best of Grantor’s knowledge, there are no strikes, boycotts, or labor disputes which could reasonably be anticipated to have a material adverse effect on the operation of the Property.

(dd)          No Purchase Options .  No Tenant, Person, or party has an option to purchase the Property, any portion thereof or any interest therein.  For purposes hereof, “Person”

shall mean and refer to an individual, partnership, limited partnership, corporation, limited liability company, trust, joint stock company, corporation, unincorporated association, joint venture, governmental authority or agency, or any other entity of any nature whatsoever, whether similar or dissimilar to the foregoing.

(ee)          Leases .  The Property is not subject to any leases, subleases, licenses, concessions or other agreements related to the occupancy, leasing or renting of the Property or any portion thereof, except for the TRS Lease and as set forth on the rent roll provided to Beneficiary and certified by Grantor on the date hereof.  No person has any possessory interest in the Property or right to occupy the same, except pursuant to a written lease, license, rental agreement or occupancy agreement (collectively, the “Leases”) identified on the rent roll provided by Beneficiary and certified by Grantor on the date hereof.  As of the date hereof, (i) the Grantor is the owner and holder of the landlord's interest under the TRS Lease and the Tenant is the sole owner and holder of the landlord’s interest under the other Leases; (ii) there are no prior assignments of all or any portion of the Leases or any portion of the Rents and Profits which are presently outstanding and have priority over the assignment of leases and rents contained herein in Section 1.11 given by Grantor to Beneficiary; (iii) all Rents due and payable under the TRS Lease and, to Grantor’s knowledge, each other Lease, have been paid in full and no said Rents have been paid more than one (1) month in advance of the due dates thereof and (iv) there are no offsets or defenses to the payment of any portion of the Rents under the TRS Lease or, to Grantor’s knowledge, under any of the other Leases.  The representations set forth in this Paragraph (ee) are in addition to those set forth in Section 1.12 of this Security Instrument.

(ff)            Appraisal .  All requirements and conditions of the appraisal of the Property submitted to Beneficiary as part of the Loan Application, upon which the value of the Property was conditioned, have been fully satisfied (or waived in writing by Lender).

(gg)          Boundary Lines .  To Grantor’s knowledge, all of the Improvements which were included in determining the appraised value of the Property lie wholly within the boundaries and building restriction lines of the Property, and no improvements on adjoining properties encroach upon the Property, and no easements or other encumbrances upon the Real Estate encroach upon any of the Improvements, so as to affect the value or marketability of the Property except those which are insured against by title insurance.

(hh)          Survey .  The survey of the Property delivered to Beneficiary in connection with this Security Instrument has been performed by a duly licensed surveyor or registered professional engineer in the jurisdiction in which the Property is situated, is certified to the Beneficiary, its successors and assigns, and the title insurance company, and, to Grantor’s knowledge, is in accordance with the most current minimum standards for title surveys as determined by the American Land Title Association, with the signature and seal of a licensed engineer or surveyor affixed thereto, and does not fail to reflect any material matter affecting the Property or the title thereto.

(ii)            Forfeiture .  There has not been and shall never be committed by Grantor or, to Grantor’s knowledge after due investigation, any other person in occupancy of or involved with the operation or use of the Property any act or omission affording the federal government or any state or local government the right of forfeiture as against the Property or any part thereof or

any monies paid in performance of Grantor's obligations under any of the Loan Documents.

(jj)            Use of Rents and Profits .  All Rents and Profits generated by or derived from the Property shall first be utilized solely for current expenses directly attributable to the ownership and operation of the Property, including, without limitation, current expenses relating to Grantor's liabilities and obligations with respect to this Security Instrument and the other Loan Documents, and none of the Rents and Profits generated by or derived from the Property shall be diverted by Grantor and utilized for any other purposes unless all such current expenses attributable to the ownership and operation of the Property (including payment of management fees due under the Management Agreement, as such term is hereinafter defined) have been fully paid and satisfied. Any license agreements which generate income with respect to the Property, including cable licenses or similar arrangements, are not prepaid and the benefits thereof have been assigned for the benefit of Beneficiary.

(kk)           No Broker .  No financial advisors, brokers, underwriters, placement agents, agents or finders have been dealt with by the Grantor in connection with the Loan, except for any broker whose full commission was paid out of the proceeds of the Loan and is set forth in the written instructions from Grantor to Beneficiary regarding disbursement of the proceeds of the Loan.

(ll)            Work .  All work to be performed by Grantor under any Lease has been substantially performed, all contributions to be made by Grantor to the Tenant under such Lease have been made and all other conditions precedent to the Tenant's obligations thereunder have been satisfied.

(mm)         Conviction of Criminal Acts .  Each of Grantor, any indemnitor and guarantor of Grantor's obligations under the Loan Documents, and any general partner, member or principal of Grantor, and any such indemnitor or guarantor of Grantor, has never been convicted of a crime and is not currently the subject of any pending or threatened criminal investigation or proceeding.

(nn)          Security Agreements .  There are no security agreements or financing statements affecting any of the Property other than (i) as disclosed in writing by Grantor to Beneficiary prior to the date hereof and (ii) the security agreements and financing statements created in favor of Beneficiary.

(oo)          Homestead .  The Property forms no part of any property owned, used or claimed by Grantor as a residence or business homestead and is not exempt from forced sale under the laws of the State in which the Real Estate is located.  Grantor hereby disclaims and renounces each and every claim to all or any portion of the Property as a homestead.

(pp)          Contracts .  Grantor will comply with all of its obligations under all Contracts which are material to the operation of the Property in accordance with Grantor's current practice, and with all material obligations under all other Contracts.

(qq)          No Margin Stock .  None of the proceeds of the indebtedness secured hereby will be used for the purpose of purchasing or carrying "margin stock" within the meaning of Regulation U or a "margin security" with the meaning of Regulation T issued by the Board of

Governors of the Federal Reserve System, or for any other purpose which would be inconsistent with such Regulations T or U or any other Regulations of such Board of Governors, or for any purpose prohibited by legal requirements or by the terms and conditions of the Loan Documents.

(rr)            All Appropriate Inquiry .  Grantor has completed all appropriate inquiry in accordance with 40 CFR Part 312 and ASTM E1527-05 and has met all of the requirements and obligations of a bona fide prospective purchaser pursuant to 42 U.S.C. 9601(40).

(qq)          TRS Lease .  With respect to the TRS Lease:  (i) Grantor has delivered to Beneficiary a true and complete copy of the TRS Lease, including all amendments thereto, (ii) the TRS Lease is in full force and effect on the date hereof, (iii) no notice of termination of the TRS Lease has been given or received by Grantor, (iv) such TRS Lease is (and shall continue to be, at Beneficiary’s option) subject and subordinate to this Security Instrument without necessity of any further agreement or acknowledgment on the part of the tenant thereunder, and (v) there are no defaults under the TRS Lease as of the date hereof, nor, to Grantor’s knowledge, any circumstances which, with the passage of time or giving of notice would constitute a default thereunder by landlord or tenant.

1.2   Defense of Title .  If, while this Security Instrument is in force, the title to the Property or the interest of Beneficiary therein shall be the subject, directly or indirectly, of any action at law or in equity, or be attacked directly or indirectly, or endangered, clouded or adversely affected in any manner, Grantor, at Grantor's expense, shall take all necessary and proper steps for the defense of said title or interest, including the employment of counsel reasonably approved by Beneficiary, the prosecution or defense of litigation, and the compromise or discharge of claims made against said title or interest.  Notwithstanding the foregoing, in the event that Beneficiary reasonably determines that Grantor is not adequately performing its obligations under this Section, Beneficiary may, without limiting or waiving any other rights or remedies of Beneficiary hereunder, take such steps with respect thereto as Beneficiary shall deem necessary or proper; any and all costs and expenses incurred by Beneficiary in connection therewith, together with interest thereon at the Default Interest Rate (as defined in the Note) from the date incurred by Beneficiary until actually paid by Grantor, shall be immediately paid by Grantor on demand and shall be secured by this Security Instrument and by all of the other Loan Documents securing all or any part of the indebtedness evidenced by the Note.

1.3   Performance of Obligations .  Grantor shall pay when due the principal of and the interest on the indebtedness secured hereby including all charges, fees and other sums required to be paid by Grantor as provided in the Loan Documents, and shall observe, perform and discharge all obligations, and conditions, and comply with all prohibitions, covenants and agreements to be observed, performed or discharged by Grantor set forth in the Loan Documents in accordance with their terms.  In the event that Beneficiary determines that Grantor is not adequately performing any of its obligations under this Security Instrument or under any of the other Loan Documents, Beneficiary may, without limiting or waiving any other rights or remedies of Beneficiary hereunder, take such steps with respect thereto as Beneficiary shall deem necessary or proper,  and any and all costs and expenses reasonably incurred by Beneficiary in connection therewith, together with interest thereon at the Default Interest Rate (as defined in the Note) from the date incurred by Beneficiary until actually paid by Grantor,

shall be immediately paid by Grantor on demand and shall be secured by this Security Instrument and by all of the other Loan Documents securing all or any part of the indebtedness evidenced by the Note.

1.4   Insurance .  Grantor shall, at Grantor's expense, maintain in force and effect on the Property at all times while this Security Instrument continues in effect the following insurance:

(a)           Insurance against loss or damage to the Property by fire, windstorm, lightning, tornado and hail and against loss and damage by such other, further and additional risks including, but not limited to, vandalism, malicious mischief, acts of terrorism, riot and civil commotion, burglary and theft, as may be now or hereafter embraced by an "all-risk" form of insurance policy.  The amount of such insurance shall be not less than one hundred percent (100%) of the full replacement (insurable) cost of the Improvements, furniture, furnishings, fixtures, equipment and other items (whether personalty or fixtures) included in the Property and owned by Grantor from time to time, without reduction for depreciation.  The determination of the replacement cost amount shall be adjusted annually to comply with the requirements of the insurer issuing such coverage or, at Beneficiary's election, by reference to such indices, appraisals or information as Beneficiary determines in its reasonable discretion.  Full replacement cost, as used herein (“ Full Replacement Cost ”), means, with respect to the Improvements, the cost of replacing the Improvements without regard to deduction for depreciation, exclusive of the cost of excavations, foundations and footings below the lowest basement floor, and means, with respect to such furniture, furnishings, fixtures, equipment and other items, the cost of replacing the same, in each case, with inflation guard coverage to reflect the effect of inflation, or annual valuation.  Each policy or policies shall contain a replacement cost endorsement and either an agreed amount endorsement (to avoid the operation of any co-insurance provisions) or a waiver of any co-insurance provisions, all subject to Beneficiary's approval.  If the Property is non-conforming with respect to zoning requirements, at a minimum (Beneficiary having the right, in its reasonable discretion to require greater coverage), Grantor shall be required to maintain ‘demolition’ insurance (in a minimum amount equal to ten percent (10%) of the value of the Improvements) and ‘increased cost of construction’ insurance (in a minimum amount equal to twenty–five (25%) of the value of the Improvements.

(b)           Comprehensive Commercial General Liability Insurance including broad form coverage property damage, contractual damage and personal injury (including bodily injury and death), with liquor liability endorsement if liquor is sold at the Property, in amounts not less than $___________ per occurrence and $________________ in the aggregate (both inclusive of umbrella coverage).  During any construction on the Property, each contractor having a contract for construction in an amount equal to or greater than $100,000 shall also provide the insurance required in this Subsection (b), except that the minimum required coverages shall be $1,000,000 per occurrence and $2,000,000 in the aggregate (both inclusive of umbrella coverage).  Beneficiary hereby retains the right to periodically review the amount of said liability insurance being maintained by Grantor and to require an increase in the amount of said liability insurance should Beneficiary deem an increase to be reasonably prudent under then existing circumstances.

(c)           General boiler and machinery insurance coverage is required if steam boilers or other pressure-fired vessels are in operation at the Property.  Minimum liability

amount per accident must equal the greater of the replacement (insurable) value of the Improvements housing such boiler or pressure-fired machinery or $2,000,000.00.

(d)           If the Property or any part thereof is identified by the Federal Emergency Management Agency (or successor governmental agency or authority performing such identification function) as being situated in an area now or subsequently designated as having special flood hazards (including, without limitation, those areas designated as Zone A or Zone V), flood insurance in an amount equal to (a) the maximum insurance available under the appropriate National Flood Insurance Administration program plus such excess limits as Beneficiary may require and (b) having deductibles not in excess of $25,000.00.  To the extent the Property is not in a flood zone as described above, but is located in the vicinity of a body of water, Beneficiary may require flood coverage.

(e)           During the period of any construction on the Property or renovation or alteration of the Improvements, a so-called "Builder's All-Risk Completed Value" or "Course of Construction" insurance policy in non-reporting form for any Improvements under construction, renovation or alteration in an amount approved by Beneficiary and Worker's Compensation Insurance covering all persons engaged in such construction, renovation or alteration.

(f)            Business interruption and/or loss of rental income insurance must be maintained in an amount sufficient to provide proceeds which will cover the ‘actual loss’ sustained during restoration.  Actual loss shall mean projected gross revenues (less non-recurring expenses) for a period of not less than   twelve (12) months with a one hundred eighty day ‘extended period of indemnity’. The amount of coverage shall be adjusted annually to reflect changes to ‘actual loss’ during the succeeding twelve (12) month period.  The perils covered by this insurance shall be the same as those required to be covered on the Property, including, but not limited to, flood, windstorm and earthquake, as applicable.

(g)           Automobile liability coverage for all owned and non-owned vehicles, including rented and leased vehicles containing minimum limits per occurrence of One Million and No/100 Dollars ($1,000,000.00).

(h)           Worker’s compensation coverage and employee’s liability coverage subject to the worker’s compensation laws of the applicable State.

(i)            Such other insurance on the Property or on any replacements or substitutions thereof or additions thereto as may from time to time be required by Beneficiary against other insurable hazards or casualties which at the time are commonly insured against in the case of property similarly situated including, without limitation, Sinkhole, Mine Subsidence, Law and Ordinance, Earthquake and Environmental insurance, due regard being given to the height and type of buildings, their construction, location, use and occupancy.

All such insurance shall (i) be with insurers authorized to do business in the State within which the Property is located and who have and maintain a rating of at least “A" (or its equivalent) from Standard & Poor’s, a Division of The McGraw-Hill Companies, Inc. or any other nationally recognized statistical agency selected by Beneficiary, or at Beneficiary's election, a Best Rating of A-IX or better, (ii) contain the complete address of the Property (or a

complete legal description), (iii) be for terms of at least one year, (iv) contain deductibles which do not exceed $10,000.00 or, with respect to the policy described in clause (d) above $3,000, and (v) be subject to the approval of Beneficiary as to insurance companies, amounts, content, forms of policies, method by which premiums are paid and expiration dates.  Without limitation to the generality of the foregoing, the all risk insurance and loss of rents or business income insurance policies required under subsections (a), (b) and (f) above, respectively, shall be required to cover perils of terrorism and acts of terrorism.

Grantor shall as of the date hereof deliver to Beneficiary evidence that said insurance policies have been paid current as of the date hereof and certified copies of such insurance policies and original certificates of insurance signed by an authorized agent of the applicable insurance companies evidencing such insurance satisfactory to Beneficiary.  Grantor shall renew all such insurance and deliver to Beneficiary certificates evidencing such renewals at least thirty (30) days before any such insurance shall expire.  Without limiting the required endorsements to the insurance policies, Grantor further agrees that all such policies shall include a standard, non-contributory, mortgagee clause naming:

Cornerstone Operating Partnership, LP

1920 Main Street

Suite 400

Irvine, California 92614

(x) as an additional insured under all liability insurance policies, (y) as the first mortgagee on all property insurance policies and (z) as the loss payee on all loss of rents or loss of business income insurance policies.  Grantor further agrees that all such insurance policies: (1) shall provide for at least thirty (30) days' prior written notice to Beneficiary prior to any cancellation or termination thereof and prior to any modification thereof which affects the interest of Beneficiary; (2) shall contain an endorsement or agreement by the insurer that any loss shall be payable to Beneficiary in accordance with the terms of such policy notwithstanding any act or negligence of Grantor which might otherwise result in forfeiture of such insurance; (3) shall waive all rights of subrogation against Beneficiary; and (4) in the event that the Real Estate or the Improvements constitutes a legal non-conforming use under applicable building, zoning or land use laws or ordinances, shall include an ordinance or law coverage endorsement which will contain Coverage A:  "Loss Due to Operation of Law" (with a minimum liability limit equal to Replacement Cost With Agreed Value Endorsement), Coverage B:  "Demolition Cost" and Coverage C: "Increased Cost of Construction" coverages.  Beneficiary agrees that such insurance policies may be in the form of a blanket policy provided that, in the event that any such coverage is provided in the form of a blanket policy, Grantor hereby acknowledges and agrees that failure to pay any portion of the premium therefor which is not allocable to the Property or by any other action not relating to the Property which would otherwise permit the issuer thereof to cancel the coverage thereof, would require the Property to be insured by a separate, single-property policy.  The blanket policy must properly identify and fully protect the Property as if a separate policy were issued for 100% of Full Replacement Cost at the time of loss and otherwise meet all of Beneficiary's applicable insurance requirements set forth in this Section 1.4 .  The delivery to Beneficiary of the insurance policies or the certificates of insurance as provided above shall constitute an assignment of all proceeds payable under such insurance policies relating to the Property by Grantor to Beneficiary as further security for the indebtedness secured hereby.  In

the event of foreclosure of this Security Instrument, or other transfer of title to the Property in extinguishment in whole or in part of the secured indebtedness, all right, title and interest of Grantor in and to all proceeds payable under such policies then in force concerning the Property shall thereupon vest in the purchaser at such foreclosure, or in Beneficiary or other transferee in the event of such other transfer of title.  Approval of any insurance by Beneficiary shall not be a representation of the solvency of any insurer or the sufficiency of any amount of insurance.  In the event Grantor fails to provide, maintain, keep in force or deliver and furnish to Beneficiary the policies of insurance required by this Security Instrument or evidence of their renewal as required herein, Beneficiary may, but shall not be obligated to, procure such insurance and Grantor shall pay all amounts advanced by Beneficiary therefore, together with interest thereon at the Default Interest Rate from and after the date advanced by Beneficiary until actually repaid by Grantor, promptly upon demand by Beneficiary.  Any amounts so advanced by Beneficiary, together with interest thereon, shall be secured by this Security Instrument and by all of the other Loan Documents securing all or any part of the indebtedness secured hereby.  Beneficiary shall not be responsible for nor incur any liability for the sufficiency of any insurance, the insolvency of the insurer or any other failure of the insurer to perform, even though Beneficiary has caused the insurance to be placed with the insurer after failure of Grantor to furnish such insurance in accordance herewith.  Grantor shall not obtain insurance for the Property in addition to that required by Beneficiary without the prior written consent of Beneficiary, which consent will not be unreasonably withheld provided that (i) Beneficiary is a named insured on such insurance, (ii) Beneficiary receives complete copies of all policies evidencing such insurance, and (iii) such insurance and the related insurer comply with all of the applicable requirements set forth herein.

1.5   Payment of Taxes .  Grantor shall pay or cause to be paid, except to the extent provision is actually made therefore pursuant to Section 1.6 of this Security Instrument, all taxes and assessments which are or may become a lien on the Property or which are assessed against or imposed upon the Property.  Upon request by Beneficiary, Grantor shall furnish Beneficiary with receipts (or if receipts are not immediately available, with copies of canceled checks evidencing payment with receipts to follow promptly after they become available) showing payment of such taxes and assessments at least fifteen (15) days prior to the applicable delinquency date therefore.  Notwithstanding the foregoing, Grantor may in good faith, by appropriate proceedings and upon notice to Beneficiary, contest the validity, applicability or amount of any asserted tax or assessment so long as (a) such contest is diligently pursued, (b) Beneficiary determines, in its subjective opinion, that such contest suspends the obligation to pay the tax or assessment and that nonpayment of such tax or assessment will not result in the sale, loss, forfeiture or diminution of the Property or any part thereof or any interest of Beneficiary therein, and (c) prior to the earlier of the commencement of such contest or the delinquency date of the asserted tax or assessment, Grantor deposits in the Impound Account (as hereinafter defined) an amount determined by Beneficiary to be adequate to cover the payment of such tax or assessment and a reasonable additional sum to cover possible interest, costs and penalties; provided , however , that Grantor shall promptly cause to be paid any amount adjudged by a court of competent jurisdiction to be due, with all interest, costs and penalties thereon, promptly after such judgment becomes final; and provided further that in any event each such contest shall be concluded and the taxes, assessments, interest, costs and penalties shall be paid prior to the date any writ or order is issued under which the Property may be sold, lost or forfeited.

1.6   Tax and Insurance Impound Account .  If and when required by Beneficiary by notice to Grantor on or after the date hereof (it being acknowledged that the same is not required prior to the occurrence of an Event of Default hereunder), Grantor shall establish and maintain at all times while this Security Instrument continues in effect an impound account (the " Impound Account ") with Beneficiary for payment of real estate taxes and assessments and insurance on the Property and as additional security for the indebtedness secured hereby.  Grantor shall deposit in the Impound Account an amount determined by Beneficiary to be sufficient (when added to the monthly deposits described herein) to pay the next due annual installment of real estate taxes and assessments on the Property at least one (1) month prior to the delinquency date thereof and the next due annual insurance premiums with respect to the Property at least one (1) month prior to the due date thereof.  Upon requirement by Lender for establishment of such Impound Account, and continuing thereafter on each monthly payment date under the Note, Grantor shall pay to Beneficiary, concurrently with the monthly payment due under the Note, deposits in an amount equal to one-twelfth (1/12) of the amount of the annual real estate taxes and assessments that will next become due and payable on the Property, plus one-twelfth (1/12) of the amount of the annual premiums that will next become due and payable on insurance policies which Grantor is required to maintain hereunder, each as estimated and determined by Beneficiary.  So long as no default hereunder or under the other Loan Documents has occurred and is continuing, all sums in the Impound Account shall be held by Beneficiary in the Impound Account to pay said taxes, assessments and insurance premiums in one installment before the same become delinquent.  Grantor shall be responsible for ensuring the receipt by Beneficiary, at least thirty (30) days prior to the respective due date for payment thereof, of all bills, invoices and statements for all taxes, assessments and insurance premiums to be paid from the Impound Account, and so long as no default hereunder or under the other Loan Documents has occurred and is continuing, Beneficiary shall pay the governmental authority or other party entitled thereto directly to the extent funds are available for such purpose in the Impound Account.  In making any payment from the Impound Account, Beneficiary shall be entitled to rely on any bill, statement or estimate procured from the appropriate public office or insurance company or agent without any inquiry into the accuracy of such bill, statement or estimate and without any inquiry into the accuracy, validity, enforceability or contestability of any tax, assessment, valuation, sale, forfeiture, tax lien or title or claim thereof.  No interest on funds contained in the Impound Account shall be paid by Beneficiary to Grantor and any interest or other earnings on funds deposited in the Impound Account shall be solely for the account of Beneficiary.  If the total funds in the Impound Account shall exceed the amount of payments actually applied by Beneficiary for the purposes of the Impound Account, such excess may be credited by Beneficiary on subsequent payments to be made hereunder or, at the option of Beneficiary, refunded to Grantor.  If, however, the Impound Account shall not contain sufficient funds to pay the sums required when the same shall become due and payable, Grantor shall, within the earlier to occur of ten (10) days after receipt of written notice thereof and two (2) Business Days prior to the tax due date, deposit with Beneficiary the full amount of any such deficiency.

1.7  Intentionally reserved.  

1.8   Security Interest In Reserves .  i)  As additional security for the payment and performance by Grantor of all duties, responsibilities and obligations under the Note and the other Loan Documents, Grantor hereby unconditionally and irrevocably assigns, conveys,

pledges, mortgages, transfers, delivers, deposits, sets over and confirms unto Beneficiary, and hereby grants to Beneficiary a security interest in all sums on deposit or due under this Security Instrument and the other Loan Documents including, without limitation, (i) the Impound Account, and, to the extent set forth on Exhibit " B " attached hereto, any Repair and Remediation Reserve, Replacement Reserve, Environmental Reserve, Curtailment Reserve, and any other reserve set forth on Exhibit " B " attached hereto, the Lease Termination Payment Reserve, the Cash Collateral Account and any other accounts or sub-accounts thereof established pursuant to the Cash Management Agreement, as such terms are defined in that certain Cash Management Agreement date on or about the date hereof (the “ Cash Management Agreement ”) by and among Grantor, Beneficiary and Manager   (collectively, the " Reserves "), (ii) the accounts into which the Reserves have been deposited, (iii) all insurance on said accounts, (iv) all accounts, contract rights and general intangibles or other rights and interests pertaining thereto, (v) all sums now or hereafter therein or represented thereby, (vi) all replacements, substitutions or proceeds thereof, (vii) all instruments and documents now or hereafter evidencing the Reserves or such accounts, (viii) all powers, options, rights, privileges and immunities pertaining to the Reserves (including the right to make withdrawals therefrom), and (ix) all proceeds of the foregoing.  Grantor hereby authorizes and consents to the account into which the Reserves have been deposited being held in Beneficiary's name or the name of any entity servicing the Note for Beneficiary and hereby acknowledges and agrees that Beneficiary, or at Beneficiary's election, such servicing agent, shall have exclusive control over said account.  Notice of the assignment and security interest granted to Beneficiary herein may be delivered by Beneficiary at any time to the financial institution wherein the Reserves have been established, and Beneficiary, or such servicing entity, shall have possession of all passbooks or other evidences of such accounts.  Grantor hereby holds Beneficiary harmless with respect to all risk of loss regarding amounts on deposit in the Reserves, except to the extent that any such loss is caused by the gross negligence or intentional misconduct of Beneficiary.  Grantor hereby knowingly, voluntarily and intentionally stipulates, acknowledges and agrees that the advancement of the funds from the Reserves as set forth herein is at Grantor's direction and is not the exercise by Beneficiary of any right of set-off or other remedy upon a default.  If a default shall occur hereunder or under any other of the Loan Documents which is not cured within any applicable grace or cure period, then Beneficiary may, without notice or demand on Grantor, at its option:  (A) withdraw any or all of the funds (including, without limitation, interest) then remaining in the Reserves and apply the same, after deducting all costs and expenses of safekeeping, collection and delivery (including, but not limited to, attorneys' fees, costs and expenses) to the indebtedness evidenced by the Note or any other obligations of Grantor under the other Loan Documents in such manner or as Beneficiary shall deem appropriate in its sole discretion, and the excess, if any, shall be paid to Grantor, (B) exercise any and all rights and remedies of a secured party under any applicable Uniform Commercial Code, or (C) exercise any other remedies available at law or in equity.  No such use or application of the funds contained in the Reserves shall be deemed to cure any default or Event of Default hereunder or under the other Loan Documents.

The Reserves are solely for the protection of Beneficiary and entail no responsibility on Beneficiary's part beyond the payment of the respective costs and expenses in accordance with the terms thereof and beyond the allowing of due credit for the sums actually received.  Upon assignment of this Security Instrument by Beneficiary, any funds in the Reserves shall be turned over to the assignee and any responsibility of Beneficiary, as assignor, with respect thereto shall terminate.  The Reserves shall not, unless otherwise explicitly required by

applicable law, be or be deemed to be escrow or trust funds, but, at Beneficiary's option and in Beneficiary's discretion, may either be held in a separate account or be commingled by Beneficiary with the general funds of Beneficiary.  Upon full payment of the indebtedness secured hereby in accordance with its terms (or if earlier, the completion of the applicable conditions to release of each Reserve to Beneficiary's satisfaction) or at such earlier time as Beneficiary may elect, the balance in Reserves then in Beneficiary's possession shall be paid over to Grantor and no other party shall have any right or claim thereto.

Any amounts received by Beneficiary from Grantor may be invested by Beneficiary (or its servicer) for its benefit, and Beneficiary shall not be obligated to pay, or credit, any interest earned thereon to Grantor except as may be otherwise specifically provided in this Security Instrument.

1.9   Casualty and Condemnation .  Grantor shall give Beneficiary prompt written notice of the occurrence of any casualty affecting, or the institution of any proceedings for eminent domain or for the condemnation of, the Property or any portion thereof (collectively, an " Insured Event ").  All insurance proceeds on the Property, and all causes of action, claims, compensation, awards and recoveries for any damage, condemnation or taking of all or any part of the Property or for any damage or injury to it for any loss or diminution in value of the Property, are hereby assigned to and shall be paid to Beneficiary (and Grantor hereby covenants and agrees that Grantor shall deliver or cause to be delivered to Beneficiary any proceeds or awards which may be payable to, or received by, Grantor).  Beneficiary may participate in any suits or proceedings relating to any such proceeds, causes of action, claims, compensation, awards or recoveries and Beneficiary is hereby authorized, in its own name or in Grantor's name, to adjust any loss covered by insurance or any condemnation claim or cause of action, and to settle or compromise any claim or cause of action in connection therewith, and Grantor shall from time to time deliver to Beneficiary any instruments required to permit such participation; provided , however , that Beneficiary shall not have the right to participate in the adjustment of any loss which is not in excess of $350,000.00 (the “ Threshold Amount ”).  If requested by Beneficiary, Grantor shall provide copies to Beneficiary of all notices or filings made or received by Grantor in connection with such casualty or condemnation suits or proceedings or with respect to the collection of the insurance proceeds or condemnation award, as the case may be.  Provided no default is then continuing hereunder or under any of the other Loan Documents beyond applicable notice and/or cure period, if any, provided herein, and no event has occurred which, with the giving of notice or the passage of time or both, would constitute an Event of Default hereunder or under any of the other Loan Documents,  Beneficiary shall apply any sums received by it under this Section first to the payment of all of its costs and expenses (including, but not limited to, reasonable legal fees and disbursements) incurred in obtaining those sums, and then, as follows:

In the event that Beneficiary receives insurance proceeds or condemnation awards upon the occurrence of an Insured Event in an amount not in excess of the Threshold Amount, Beneficiary shall, to the extent such insurance proceeds or condemnation awards are available for such purpose, disburse to Grantor the amount paid or incurred by Grantor as a result of any such Insured Event for costs and expenses incurred by Grantor to repair or restore the Property (collectively the " Casualty Repairs ") within ten (10) days following: (A) the receipt by Beneficiary of a written request from Grantor for disbursement and a certification by Grantor to

Beneficiary that the applicable item of Repair has been completed; (B) the delivery to Beneficiary of invoices, receipts or other evidence verifying the cost of performing the Casualty Repairs; and (C) for disbursement requests (i) in excess of $20,000.00 with respect to any single Casualty Repair, or (ii) for any single Casualty Repair that is structural in nature, delivery to Beneficiary of (1) affidavits, lien waivers or other evidence reasonably satisfactory to Beneficiary showing that all materialmen, laborers, subcontractors and any other parties who might or could claim statutory or common law liens and are furnishing or have furnished material or labor to the Property have been paid all amounts due for labor and materials furnished to the Property; (2) a certification from an inspecting architect or other third party acceptable to Beneficiary describing the completed Casualty Repairs and verifying the completion of the Casualty Repairs and the value of the completed Casualty Repairs; and (3) a new (or amended) certificate of occupancy for the portion of the Improvements covered by such Casualty Repairs, if said new certificate of occupancy was required by law, or a certification by Grantor that no new certificate of occupancy was required by law.  Beneficiary shall not be required to make any such advances more frequently than one time in any calendar month.  In the event any proceeds or awards from an Insured Event exceed the Threshold Amount but less than thirty-five (35%) percent of the Improvements located on the Real Estate have been taken or destroyed, then if:

(a)      the Property can, in Beneficiary's reasonable judgment, with diligent restoration or repair, be returned to a condition at least equal to the condition thereof that existed prior to the casualty or partial taking causing the loss or damage within the earlier to occur of (i) six (6) months after the receipt of insurance proceeds or condemnation awards by either Grantor or Beneficiary, (ii) six (6) months prior to the stated maturity date of the Note, (iii) the earliest date by which completion is required under applicable law to preserve the right to rebuild the Improvements as they existed prior to the casualty or condemnation, (iv) the earliest date by which completion is required under any Major Lease, (v) Leases covering in the aggregate at least fifty percent (50%) of the rentable square feet of the Property (as existed immediately prior to the occurrence of the casualty or condemnation) shall remain in effect during and upon completion of the restoration, and (vi) the expiration of Grantor’s business interruption insurance policy, and

(b)      all necessary governmental approvals can be obtained to allow the rebuilding and re-occupancy of the Property as described in subsection (b)(1) above, and

(c)      there are sufficient sums available (through insurance proceeds or condemnation awards and contributions by Grantor, the full amount of which shall at Beneficiary's option have been deposited with Beneficiary) for such restoration or repair (including, without limitation, for any reasonable costs and expenses of Beneficiary to be incurred in administering said restoration or repair) and for payment of principal and interest to become due and payable under the Note during such restoration or repair, and

(d)      the economic feasibility of the Improvements after such restoration or repair will be such that income from their operation is reasonably anticipated to be sufficient to pay operating expenses of the Property and debt service on the indebtedness secured hereby in full with the same coverage ratio considered by Beneficiary in its determination to make the Loan, and

(e)      Grantor shall have delivered to Beneficiary, at Grantor's sole cost and expense, an appraisal report from an appraiser, in form and substance, satisfactory to Beneficiary appraising the value of the Property as proposed to be restored or repaired to be not less than the appraised value of the Property considered by Beneficiary in its determination to make the Loan, and

(f)      Grantor confirms by written notice delivered to Beneficiary within five (5) days after settlement of the aforesaid insurance or condemnation claim its intention to repair and restore as herein provided, and

(g)      the Property can, in Beneficiary’s and Grantor’s reasonable judgment, be repaired or restored such that the Property, taken as a whole, as repaired or restored, will conform to all applicable governmental laws and ordinances including, without limitation, then current zoning ordinances,

then, Beneficiary shall, provided no Event of Default has occurred which is then continuing, solely for the purposes of such restoration or repair, advance so much of the remainder of such sums as may be required to facilitate such restoration or repair, and any funds deposited by Grantor therefore, to Grantor in the manner and upon such terms and conditions as would be required by a prudent interim construction lender, including, but not limited to, the prior approval by Beneficiary of plans and specifications, contractors and the form of construction contracts and the furnishing to Beneficiary of permits, bonds, lien waivers, invoices, receipts and affidavits from contractors and subcontractors in form and substance reasonably satisfactory to Beneficiary.  Any remaining proceeds shall be applied by Beneficiary for payment of the indebtedness secured hereby in whatever order as Beneficiary directs, or released to Grantor, in its absolute discretion.  Grantor shall, in good faith, undertake reasonable efforts to cause the conditions described in this Section 1.9(b) to be fully satisfied (e.g., Grantor shall timely make applications for necessary governmental permits, shall order an appropriate appraisal report, etc.).  Any disbursement pursuant to this clause (b) of sums by Beneficiary shall, subject to Grantor's satisfaction of the provisions hereof, be in a manner to promptly facilitate the restoration or repair of the Property.  In the event Grantor fails to meet the requirements of this clause (b) , then Beneficiary may elect in its absolute discretion and without regard to the adequacy of Beneficiary's security, to accelerate the maturity date of the Note and declare any and all of the indebtedness secured hereby to be immediately due and payable and apply the remainder of such sums to the payment of the secured indebtedness in whatever order Beneficiary directs in its sole discretion, with any remainder being paid to Grantor.

In all other cases, namely, in the event that thirty-five (35%) percent or more of the Improvements located on the Real Estate have been taken or destroyed or in the event the conditions described in Section 1.9(b) are not fully satisfied, Beneficiary may elect, in Beneficiary's absolute discretion and without regard to the adequacy of Beneficiary's security, to (i) accelerate the maturity date of the Note and declare any and all indebtedness secured hereby to be immediately due and payable and apply the remainder of such sums received pursuant to this Section to the payment of the secured indebtedness in whatever order Beneficiary directs in its absolute discretion, with any remainder being paid to Grantor, or (ii) make insurance or condemnation proceeds available to Grantor for repair or restoration if Grantor establishes to the satisfaction of Beneficiary, in its sole discretion, that Grantor otherwise satisfies the requirements

of clause (b) above.  Should Beneficiary make the election described immediately above in item (ii) of this Section 1.9(c), Grantor shall be obligated to undertake restoration and repair of the damaged Improvements consistent with the provisions of this Section 1.9.

Any reduction in the indebtedness secured hereby resulting from Beneficiary's application of any sums received by it hereunder shall take effect only when Beneficiary actually receives such sums and elects to apply such sums to the indebtedness secured hereby and, in any event, the unpaid portion of the indebtedness secured hereby shall remain in full force and effect and Grantor shall not be excused in the payment thereof.  Partial payments received by Beneficiary, as described in the preceding sentence, shall be applied as set forth in Section 1.02(c) of the Note.  If Grantor undertakes to restore or repair the Property after the occurrence of a casualty or partial taking of the Property as provided above, Grantor shall promptly and diligently, at Grantor's sole cost and expense and regardless of whether the insurance proceeds or condemnation award, as appropriate, shall be sufficient for the purpose, restore, repair, replace and rebuild the Property as nearly as possible to its value, condition and character immediately prior to such casualty or partial taking in accordance with the foregoing provisions and Grantor shall pay to Beneficiary all costs and expenses of Beneficiary incurred in administering said rebuilding, restoration or repair, provided that Beneficiary makes such proceeds or award available for such purpose.  Grantor agrees to execute and deliver from time to time such further instruments as may be requested by Beneficiary to confirm the foregoing assignment to Beneficiary of any award, damage, insurance proceeds, payment or other compensation.  Grantor hereby irrevocably constitutes and appoints Beneficiary the attorney-in-fact of Grantor (which power of attorney shall be irrevocable so long as any indebtedness secured hereby is outstanding, shall be deemed coupled with an interest, shall survive the voluntary or involuntary dissolution of Grantor and shall not be affected by any disability or incapacity suffered by Grantor subsequent to the date hereof), with full power of substitution, subject to the terms of this Section, to settle for, collect and receive any such awards, damages, insurance proceeds, payments or other compensation from the parties or authorities making the same, to appear in and prosecute any proceedings therefor and to give receipts and acquittance therefor.

1.10   Mechanics' Liens .  Grantor shall pay when due all claims and demands of mechanics, materialmen, laborers and others for any work performed or materials delivered for the Real Estate or the Improvements; provided , however , that Grantor shall have the right to contest in good faith any such claim or demand, so long as it does so diligently, by appropriate proceedings and without prejudice to Beneficiary and provided that neither the Property nor any interest therein would be in any danger of sale, loss or forfeiture as a result of such proceeding or contest.  In the event Grantor shall contest any such claim or demand, Grantor shall promptly notify Beneficiary of such contest and thereafter shall, upon Beneficiary's request, promptly provide a bond, cash deposit or other security satisfactory to Beneficiary to protect Beneficiary's interest and security should the contest be unsuccessful.  If Grantor shall fail to immediately discharge or provide security against any such claim or demand as aforesaid, Beneficiary may do so and any and all expenses incurred by Beneficiary (of which Beneficiary shall give notice to Grantor), together with interest thereon at the Default Interest Rate from the date incurred by Beneficiary until actually paid by Grantor, shall be immediately paid by Grantor on demand and shall be secured by this Security Instrument and by all of the other Loan Documents securing all or any part of the indebtedness evidenced by the Note.

1.11   Assignment of Leases and Rents .  As additional and collateral security for the payment of the indebtedness secured hereby and cumulative of any and all rights and remedies herein provided for, Grantor hereby absolutely and presently assigns to Beneficiary all existing and future Leases (including, without limitation, the TRS Lease), and all existing and future Rents and Profits.  Grantor hereby grants to Beneficiary the sole, exclusive and immediate right, without taking possession of the Property, to demand, collect (by suit or otherwise), receive and give valid and sufficient receipts for any and all of said Rents and Profits, for which purpose Grantor does hereby irrevocably make, constitute and appoint Beneficiary its attorney-in-fact with full power to appoint substitutes or a trustee to accomplish such purpose (which power of attorney shall be irrevocable so long as any indebtedness secured hereby is outstanding, shall be deemed to be coupled with an interest, shall survive the voluntary or involuntary dissolution of Grantor and shall not be affected by any disability or incapacity suffered by Grantor subsequent to the date hereof).  Beneficiary shall be without liability for any loss which may arise from a failure or inability to collect Rents and Profits, proceeds or other payments.  However, until the occurrence of an Event of Default under this Security Instrument, Grantor shall have a license to collect and receive the Rents and Profits when due and prepayments thereof for not more than one month prior to due date thereof.  Upon the occurrence of an Event of Default, Grantor's license shall automatically terminate without notice to Grantor and Beneficiary may thereafter, without taking possession of the Property, collect the Rents and Profits itself or by an agent or receiver.  From and after the termination of such license, Grantor shall be the agent of Beneficiary in collection of the Rents and Profits and all of the Rents and Profits so collected by Grantor shall be held in trust by Grantor for the sole and exclusive benefit of Beneficiary and Grantor shall, within one (1) business day after receipt of any Rents and Profits, pay the same to Beneficiary to be applied by Beneficiary as hereinafter set forth.  Neither the demand for or collection of Rents and Profits by Beneficiary, nor the exercise of Beneficiary's rights as assignee of the Leases,  shall constitute any assumption by Beneficiary of any obligations under any Lease or other agreement relating thereto.  Beneficiary is obligated to account only for such Rents and Profits as are actually collected or received by Beneficiary.  Grantor irrevocably agrees and consents that the respective payors of the Rents and Profits shall, upon demand and notice from Beneficiary of an Event of Default hereunder, pay said Rents and Profits to Beneficiary without liability to determine the actual existence of any Event of Default claimed by Beneficiary.  Grantor hereby waives any right, claim or demand which Grantor may now or hereafter have against any such payor by reason of such payment of Rents and Profits to Beneficiary, and any such payment shall discharge such payor's obligation to make such payment to Grantor.  All Rents and Profits collected or received by Beneficiary shall be applied against all expenses of collection, including, without limitation, attorneys' fees, against costs of operation and management of the Property and against the indebtedness secured hereby, in whatever order or priority as to any of the items so mentioned as Beneficiary directs in its sole subjective discretion and without regard to the adequacy of its security.  Neither the exercise by Beneficiary of any rights under this Section nor the application of any Rents and Profits to the secured indebtedness shall cure or be deemed a waiver of any default or Event of Default hereunder.  The assignment of Leases and of Rents and Profits hereinabove granted shall continue in full force and effect during any period of foreclosure or redemption with respect to the Property.  As additional security for the indebtedness secured hereby, Grantor has executed and delivered an Assignment of Leases and Rents dated of even date herewith (as hereafter amended, consolidated or modified from time to time, the " Assignment ") in favor of Beneficiary

covering all of the right, title and interest of Grantor, as landlord, lessor or licensor, in and to any Leases.  All rights and remedies granted to Beneficiary under the Assignment shall be in addition to and cumulative of all rights and remedies granted to Beneficiary hereunder.

1.12   Leases and Licenses .

(a)       Lease Requirements .  Prior to execution of any Leases (other than the residency agreements entered into on the form approved by Beneficiary in connection with the closing of the Loan) after the date hereof, Grantor shall submit to Beneficiary, for Beneficiary's prior approval, which approval shall not be unreasonably withheld so long as no default exists hereunder, a copy of the form lease Grantor plans to use in leasing space in the Improvements.  Each Lease executed after the date hereof affecting any of the Real Estate or the Improvements must provide, in a manner approved by Beneficiary, that (i) such Lease is subject and subordinate to this Security Instrument, and (ii) the Tenant will attorn to, and recognize as its landlord, lessor or licensor, any person succeeding to the interest of Grantor in such Lease upon any foreclosure of this Security Instrument or deed in lieu of foreclosure.  Each such Lease shall also provide that, upon request of said successor-in-interest, the Tenant shall execute and deliver an instrument or instruments confirming its attornment as provided for in this Section; provided, however, that neither Beneficiary nor any successor-in-interest shall be bound by any payment of rental for more than one (1) month in advance, or any amendment or modification of said Lease made without the express written consent of Beneficiary or said successor-in-interest.  No Lease shall contain any option or right of first refusal to purchase all or any portion of the Property.  No Lease (other than any residency agreement entered into in the form approved by Lender in connection with the origination of this Loan) shall contain any right to terminate the term thereof (except in the event of the destruction of all or substantially all of the Property).

(b)       Acts Requiring Consent of Beneficiary .  Grantor shall not, without the prior written consent of Beneficiary, (i) enter into any Lease of all or any portion of the Property either (Y) for space in excess of five percent (5%) of the rentable square feet, or represents ten (10%) percent or more of the gross rents reflected on the rent roll for the Property, or (Z) for a term (including, without limitation, options exercisable by the lessee thereunder) of greater than five (5) years (any such lease, a " Major Lease "); (ii) cancel, terminate, abridge or otherwise modify the terms of the TRS Lease or any other Major Lease, or accept a surrender thereof; (iii) consent to any assignment of, or subletting of all or any portion of the premises demised under, the TRS Lease or any other Major Lease unless required by the terms thereof; (iv) cancel, terminate, abridge, release or otherwise modify any guaranty of the TRS Lease or any other Major Lease or the terms thereof; (v) enter into any Lease not meeting the requirements of Section 1.12(a) of this Security Instrument; or (vi) enter into any Lease containing material adverse variations from the current form lease approved by Beneficiary.  The request for approval of each such proposed Lease shall be made to Beneficiary in writing.  As part of such request, Grantor shall furnish to Beneficiary (and any loan servicer specified from time to time by Beneficiary) to the extent required by Beneficiary and/or such loan servicer: (1) such biographical and financial information about the proposed tenant as Beneficiary may require in conjunction with its review, (2) a copy of the proposed Lease, and (3) a summary of the material terms of such proposed Lease (including, without limitation, rental terms and the term of the proposed Lease and any options).

(c)      Affirmative Covenants Regarding Leases .  Grantor shall at all times promptly and faithfully perform, or cause to be performed, all of the covenants, conditions and agreements contained in all Leases, now or hereafter existing, on the part of the landlord, lessor or licensor thereunder to be kept and performed.  Grantor shall promptly send copies to Beneficiary and any servicer of all notices of default which Grantor shall send or receive under the TRS Lease and, upon request by Beneficiary, under any other Lease.  Grantor, at no cost or expense to Beneficiary, shall enforce, short of termination, the performance and observance of each and every condition and covenant of each of the other parties under each Lease.  Grantor shall furnish to Beneficiary, within ten (10) days after a request by Beneficiary to do so, and in any event by January 1 of each year, a current rent roll certified by Grantor as being true and correct containing the names of all Tenants, the terms of their respective Leases, the spaces occupied and the rentals or fees payable thereunder and the amount of each Tenant's security deposit.  Upon the request of Beneficiary, Grantor shall deliver to Beneficiary (i) a copy of each Lease; and (ii) an estoppel certificate from the tenant under the TRS Lease (provided that Beneficiary shall not be required to deliver such certificates more frequently than twice in any calendar year).

(d)      Negative Covenants Regarding Leases .  Grantor shall not enter into any Lease (i) without the prior written consent of Beneficiary where such consent is required pursuant to this Security Instrument; (ii) except on terms consistent with the terms for similar leases in the market area of the Real Estate, including, without limitation, as to the rental rate, security deposit, tenant improvement and work letter terms and free rent periods; (iii) other than with a third-party Tenant unrelated to Grantor or any general partner, principal, manager, member or affiliate of Grantor or any affiliate of any such general partner, principal, manager, or member of Grantor (provided that the foregoing is not applicable with respect to the TRS Lease); or (iv) except for an actual occupancy by the tenant, lessee or licensee thereunder.  Grantor shall not do or suffer to be done any act that might result in a default by the landlord, lessor or licensor under any Lease or allow the Tenant thereunder to withhold payment of rent.  Grantor shall not, without the prior written consent of Beneficiary:  (1) (x)modify the TRS Lease, or (y)modify any Major Lease in any material respect, or (z) other than in the ordinary course of business and in compliance with applicable legal requirements, otherwise modify any other Lease; (2) terminate or accept the surrender of the TRS Lease, any other Major Lease or, except in the ordinary course of business and in compliance with the requirements thereof, any other Lease; or (3) waive or release any other party from the performance or observance of any obligation or condition under any Lease; provided , however , that with respect to all Leases other than Major Leases, provided no default exists hereunder, Grantor may do any of the foregoing in the normal course of business in a manner which is consistent with sound and customary leasing and management practices for similar properties in the community in which the Property is located.  Grantor shall not solicit or accept the prepayment of any rents under any Lease for more than one (1) month prior to the due date thereof.  Except for the Assignment, Grantor shall not execute any other assignment of the lessor's interest in the Leases or the Rents and Profits or otherwise encumber, pledge or hypothecate lessor’s interest therein.

(e)      Security Deposits .  All security deposits of Tenants, whether held in cash or in any other form, shall not be commingled with any other funds of Grantor or any other person and, if cash, shall be deposited by Grantor at such commercial or savings bank or banks, or otherwise held in compliance with applicable law, as may be reasonably satisfactory to Beneficiary.  Any bond or other instrument which Grantor is permitted to hold in lieu of cash

security deposits under any applicable legal requirements shall be maintained in full force and effect in the full amount of such deposits unless replaced by cash deposits as hereinabove described; shall be issued by an institution reasonably satisfactory to Beneficiary; shall, if permitted pursuant to any applicable legal requirements, name Beneficiary as payee or mortgagee thereunder or, at Beneficiary's option, be assigned or fully assignable to Beneficiary; and shall, in all respects, comply with any applicable legal requirements and otherwise be reasonably satisfactory to Beneficiary.  Grantor shall, upon request, provide Beneficiary with evidence reasonably satisfactory to Beneficiary of Grantor's compliance with the foregoing.  Upon an Event of Default under this Security Instrument, Grantor shall, immediately upon Beneficiary's request (if permitted by applicable law), deliver to Beneficiary the security deposits (and any interest previously earned thereon and not disbursed to the person(s) lawfully entitled to receive same) with respect to all or any portion of the Property, to be held by Beneficiary subject to the terms of the Leases.

(f)       Rights of Beneficiary Upon Default .  Upon an Event of Default, whether before or after the whole principal sum secured hereby is declared to be immediately due or whether before or after the institution of legal proceedings to foreclose this Security Instrument, forthwith, upon demand of Beneficiary, Grantor shall surrender to Beneficiary and Beneficiary shall be entitled to take actual possession of the Property or any part thereof personally, or by its agent or attorneys.  In such event, Beneficiary shall have, and Grantor hereby gives and grants to Beneficiary, the right, power and authority to make and enter into Leases for such rents and for such periods of occupancy and upon conditions and provisions as Beneficiary may deem desirable in its sole discretion, and Grantor expressly acknowledges and agrees that the term of such Lease may extend beyond the date of any foreclosure sale at the Property; it being the intention of Grantor that in such event Beneficiary shall be deemed to be and shall be the attorney-in-fact of Grantor for the purpose of making and entering into Leases for the rents and upon the terms, conditions and provisions deemed desirable to Beneficiary in its sole discretion and with like effect as if such Leases had been made by Grantor as the owner in fee simple of the Property free and clear of any conditions or limitations established by this Security Instrument.  The power and authority hereby given and granted by Grantor to Beneficiary shall be deemed to be coupled with an interest, shall not be revocable by Grantor so long as any indebtedness secured hereby is outstanding, shall survive the voluntary or involuntary dissolution of Grantor and shall not be affected by any disability or incapacity suffered by Grantor subsequent to the date hereof.  In connection with any action taken by Beneficiary pursuant to this Section, Beneficiary shall not be liable for any loss sustained by Grantor resulting from any failure to let the Property, or any part thereof, or from any other act or omission of Beneficiary in managing the Property, nor shall Beneficiary be obligated to perform or discharge any obligation, duty or liability under any Lease or under or by reason of this instrument or the exercise of rights or remedies hereunder.  GRANTOR SHALL, AND DOES HEREBY, INDEMNIFY BENEFICIARY FOR, AND HOLD BENEFICIARY HARMLESS FROM, ANY AND ALL CLAIMS, ACTIONS, DEMANDS, LIABILITIES, LOSS OR DAMAGE WHICH MAY OR MIGHT BE INCURRED BY BENEFICIARY UNDER ANY SUCH LEASE OR UNDER THIS SECURITY INSTRUMENT OR BY THE EXERCISE OF RIGHTS OR REMEDIES HEREUNDER AND FROM ANY AND ALL CLAIMS AND DEMANDS WHATSOEVER WHICH MAY BE ASSERTED AGAINST BENEFICIARY BY REASON OF ANY ALLEGED OBLIGATIONS OR UNDERTAKINGS ON ITS PART TO PERFORM OR DISCHARGE ANY OF THE TERMS, COVENANTS OR AGREEMENTS CONTAINED IN ANY SUCH

LEASE OTHER THAN THOSE FINALLY DETERMINED TO HAVE RESULTED SOLELY FROM THE GROSS NEGLIGENCE OR WILLFUL MISCONDUCT OF BENEFICIARY.   SHOULD BENEFICIARY INCUR ANY SUCH LIABILITY, THE AMOUNT THEREOF, INCLUDING, WITHOUT LIMITATION, COSTS, EXPENSES AND ATTORNEYS' FEES, TOGETHER WITH INTEREST THEREON AT THE DEFAULT INTEREST RATE FROM THE DATE INCURRED BY BENEFICIARY UNTIL ACTUALLY PAID BY GRANTOR, SHALL BE IMMEDIATELY DUE AND PAYABLE TO BENEFICIARY BY GRANTOR ON DEMAND AND SHALL BE SECURED HEREBY AND BY ALL OF THE OTHER LOAN DOCUMENTS SECURING ALL OR ANY PART OF THE INDEBTEDNESS EVIDENCED BY THE NOTE.  Nothing in this Section shall impose on Beneficiary any duty, obligation or responsibility for the control, care, management or repair of the Property, or for the carrying out of any of the terms and conditions of any such Lease, nor shall it operate to make Beneficiary responsible or liable for any waste committed on the Property by the tenants or by any other parties or for any dangerous or defective condition of the Property, or for any negligence in the management, upkeep, repair or control of the Property.  Grantor hereby assents to, ratifies and confirms any and all actions of Beneficiary with respect to the Property taken under this Section.  The foregoing rights are in addition to all other rights and remedies granted to Beneficiary pursuant to this Security Instrument.

(g)       Representations to Leases .  Grantor hereby represents and warrants that (i) each Tenant under a non-residential Lease has entered into occupancy of the demised premises; and (ii) Grantor has delivered to Beneficiary true, correct and complete copies of all Leases described in the Rent Roll.

(h)       Tenant Financial Information .  Grantor shall cause the tenant under the TRS Lease (a " Major Income Lease ") to deliver to Grantor periodic operating statements with respect to (i) such Tenant's operations at the Property, and (ii) the operations of such Tenant and, if applicable, any parent or affiliated entity of such Tenant which operates, or has subsidiaries that operate, comparable businesses (collectively, " Tenant Financial Information ").  Notwithstanding the provisions of Section 1.12(b) above, any Major Income Lease entered into after the date hereof which does not require the Tenant to provide Tenant Financial Information upon request shall require the prior written approval of Beneficiary.  Grantor shall, from time to time promptly upon request of Beneficiary, request Tenant Financial Information from the Tenant under each Major Income Lease (and use all commercially reasonable efforts to obtain such Tenant Financial Information), and promptly upon receipt thereof, deliver such Tenant Financial Information to Beneficiary, provided , however , that provided no Event of Default is continuing, Beneficiary shall not request such information without reasonable cause (which reasonable cause shall include, without limitation, the occurrence of any default by the Tenant). Notwithstanding anything to the contrary contained herein, Grantor shall provide the Tenant Financial Information (A) annually, (B) each time a new Major Income Lease is executed and (iii) upon any material change in such Tenant financial situation of which Grantor shall become aware.

For purposes of this Section 1.12, in the event Beneficiary does not approve or disapprove a requested (x) proposed new Lease, or a proposed modification, extension, termination of a Lease, within ten (10) Business Days, in each case from the date Beneficiary receives such request together with a copy of the final version of such proposed new Lease or proposed extension, modification or termination of an existing Lease, as the case may be,

Grantor shall re-submit such request, with the notation “IMMEDIATE RESPONSE REQUIRED, CONSENT DEEMED GIVEN IF NO RESPONSE IS MADE WITHIN 5 DAYS” prominently displayed in bold, all caps, 14 point type or larger, at the top of each page of such re-submitted request and on any cover page or envelope, and if Beneficiary does not approve such request within five (5) calendar days from the date Beneficiary receives the re-submitted request, same shall be deemed approved.

1.13   Alienation and Further Encumbrances .

Grantor acknowledges that Beneficiary has relied upon the Grantor and the principals of Grantor and their experience in owning and operating properties similar to the Property in agreeing to make the loan evidenced by the Note and will continue to rely upon Grantor’s ownership of the Property as a means of maintaining the value of the Property as security for repayment of the Note and the performance of the obligations of Grantor contained herein and the other Loan Documents.  Grantor acknowledges that Beneficiary has a valid interest in maintaining the value of the Property so as to ensure that the indebtedness secured hereby may be recovered by Beneficiary should Grantor default in the repayment of the indebtedness secured hereby or the performance of the obligations of Grantor hereunder and under the other Loan Documents.

Accordingly, except as specifically allowed hereinbelow in this Section and notwithstanding anything to the contrary contained in Section 4.6 hereof, in the event that the Property or any part thereof or any interest therein or any interest in Borrower or its general partner shall be sold, conveyed, disposed of, alienated, hypothecated, leased (except to Tenants under Leases which are approved, or deemed approved, in accordance with the provisions of Section 1.12 hereof), assigned, pledged, mortgaged, further encumbered or otherwise transferred or Grantor or any other Restricted Party (as such term is hereinafter defined) shall be divested of its title to the Property or any interest (whether direct or indirect) therein, in any manner or way, whether voluntarily or involuntarily, by operation of law or otherwise, without the prior written consent of Beneficiary being first obtained, which consent may be withheld in Beneficiary's sole discretion (any of the foregoing being herein referred to as a “ Transfer ”), then, the same shall constitute an Event of Default hereunder and Beneficiary shall have the right, at its option, to declare any or all of the indebtedness secured hereby, irrespective of the maturity date specified in the Note, immediately due and payable and to otherwise exercise any of its other rights and remedies contained in Article III hereof.  As used in this Section 1.13, the term “ Restricted Party ” shall mean collectively, the Grantor and (i) any Transfer Principal (“ Transfer Principal ” shall mean any Person which is a managing member or non-member manager of Grantor if Grantor is a limited liability company, or a general partner of Grantor if Grantor is a partnership, and (ii) any partner, member,